In recent years, Singapore has emerged as one of the preferred destination in the world for start-ups and for Entrepreneurs looking for global expansion. There are various reasons that can be attributed to this phenomenon. Over here we are trying to explore the key reasons behind this.
Efficient and simple process for incorporating and running a new company
You can start your business within a day in Singapore. Such is the process that entrepreneurs can scale in Singapore without much paperwork. Mostly, the paperwork need not even be attested by foreign offices or notary public and a simple e-sign by the promoters is good enough to file for incorporation. Also barring few cases, one does not require any other local registration to do business. This is perhaps the reason why Singapore ranks as No. 2 in the World for Ease in Doing Business.
A well-developed economy and Robust Start-up Ecosystem
Singapore is a large economy with a matured Start-up Ecosystem. Accessibility to capital is prioritized in Singapore. Be it government grant, low interest debt or VC Investment – Start-ups in Singapore remains in a very advantageous position. As there is no capital gain tax as well as there is a very strong regulation for protection of minority investor’s rights, fund managers and Venture Capital Firms prefer Singapore based start-ups for their investment. Due to the financial benefits, many Fund houses as well Start-up Unicorn have their global headquarters in Singapore and channelize their fund from here.
A logical tax system with low tax rates
Singapore has one of the lowest tax rates among the developed nations. A flat 17% Corporate Tax Rate is applicable on chargeable income on companies. A tax system which is very logical and straight forward helps Singapore attract companies, especially Startups. There is a high exemption limit in calculating the chargeable income for first 3 years for the new companies. Also GST is applicable only when you cross a turnover of $1 million and hence one can avoid GST Compliance at least for the first few years. It has also limited restrictions on repatriation of profits or import of capital.
Strategic geographical location having admirable infrastructure facilities
Singapore is strategically located in the APAC region. It is very well connected both on road, air as well as through sea. It has become one of the biggest Business and Tourist hubs in Asia. Singapore is among the top 5 countries in the world in receiving FDI inflows and it has the highest concentration of Millionaires in the world. It attracts diversity and hence it is very useful for entrepreneurs who wish to test their proto-type in the island country and strategise accordingly.
Strong Intellectual Protection Norms
For any tech company IPR remains very important and unless it is protected properly the start-up will fail to grow. Singapore has a very strong IPR regulation in place which helps to avoid malpractices or un-avoidable theft of intellectual property. These laws help in protecting the business secrets and technical know-how and help companies to grow in its own right.
These along with various other factors like political stability, good international relationship, and availability of skilled workforce make Singapore a much favoured destination for start-ups and emerging global companies.
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